Live Nation, the promoter that owns or manages venues such as Wembley Arena and Manchester Apollo, has signed an $80 million (£40 million) upfront deal with U2 that will tie the Irish rock band to its venues for the next 12 years.

The deal underlines the growing battle for live rights and cements the Irish fourpiece into a long-term deal, where previously the band worked with New York-listed Live Nation on a tour-by-tour basis.

Bono, lead singer of U2, said: “We've been dating for over 20 years now; it's about time we tied the knot.” Live Nation has produced every U2 tour since 1997 but company bosses first worked with the band in Toronto in 1980.

Live Nation will also handle the band's merchandise, and run its website and online fan club, a continuation of earlier agreements. The band remains signed to Vivendi's Universal Music for writing and recording.

U2 formed in 1976 and remains one of the bestselling acts in the world, for both live and recorded music. Its Vertigo tour grossed $389 million, an amount that has been surpassed only by The Rolling Stones; U2's last studio album, How To Dismantle An Atomic Bomb, sold nine million after its release in 2004.

The agreement will tie the band to Live Nation until all four members are nearly 60, although the longevity of The Rolling Stones would suggest it may be possible for the band to sign a similarly lucrative deal after that.

Live Nation's strategy of tying establised artists to its large venues is part of its attempt to move in on the turf occupied by the music majors and ticket agency Ticketmaster.

The company has already invested $120 million in a ten-year deal with Madonna that covers both touring, writing and recording rights. The touring portion of that agreement is valued at $70million. It is also chasing the Stones - who come out of their EMI recording contract this year - and has been trying to persuade Led Zeppelin to go on a world tour after their recent successful comeback concert.

However, Live Nation has struggled to impress investors, despite a belief that - unlike other parts of the music business - live music is not affected by piracy. The company is worth just over $900 million, with its shares half the levels they traded at through the second half of 2006 and the first half of 2007.

Live Nation's revenues last year hit $4.18 billion, up 12.8percent, driven largely by acquisitions including the purchase of the Brixton Academy in London, but the business continues to make a loss after tax, of $11.9 million in the year. Its operating margin is 1.9percent, well below the levels achieved by a healthy music major, such as Universal.

Michael Cohl, chairman of Live Nation, said: “It has long been our intention to consolidate and extend our relationship with U2, so this is a very exciting deal for us. The band has always been forward thinking, and as one of our original and most successful artists, we are delighted to be able to work with them for many years into the future.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive